Case Study – Gearbox DAO
Gearbox (https://gearbox.finance) is a blockchain protocol that brings about a paradigm shift in the DeFi landscape by providing on-chain leverage facilities. Governed by Gearbox DAO, which comprises $GEAR token holders, the protocol has been driven by decentralized decision-making since its inception.
Contributors from GEAR DAO reached out to DAObox to explore possibilities of creating a legal structure for the DAO. Subsequently, DAObox participated in an AMA session on Discord, centered around the prospect of structuring GEAR DAO. During this session, we outlined our strategy, addressed questions related to the proposed legal wrapper, and detailed the control mechanisms and system of checks and balances we intended to put in place.
We proposed establishing the legal wrapper as a Cayman Islands ownerless foundation, which we consider to be one of the most cost-effective and flexible DAO structures currently available. DAObox offered to assume all key roles in the foundation, including director and supervisor positions.
Substantial discussions within the GEAR DAO ensued after our proposal was published, culminating in a consensus, followed by a formal governance vote on Snapshot, which concluded on December 03, 2022.
Upon the approval of the proposal, funds were allocated by the GEAR DAO financial multisig to cover the initial expenses and the management fee for DAObox over a two-year term.
Subsequent to the formation of the Gearbox Foundation, the DAO initialized the distribution contract and transferred DAObox's token incentive to this contract, ensuring distribution in line with the designated vesting schedule.
On March 02, 2023, DAObox proposed the GEAR DAO to determine the long-term and short-term assignments for the Gearbox Foundation, encompassing IP and code acquisition and protection, technical infrastructure management, fiat account management, operation of the protocol's web interface, etc.
The proposal further included:
- recommendation on the appointment of designated DAO representatives with the authority to liaise with the Gearbox Foundation on specific infrastructure management issues; and
- proposal to allocate the 2023 annual budget of 20,000 USDC to adequately meet the anticipated costs related to tasks set forth by the DAO.
From the outset, DAObox assumed the management of the Gearbox Foundation, overseeing the day-to-day operations of the wrapper as its acting director.
As per the DAO's mandate, we undertook the acquisition and management of IP and related rights from DAO contributors and assumed supervision of all technical infrastructure associated with the protocol, including domain names and GitHub repositories.
It's crucial to note that the GEAR DAO maintains control over the Gearbox protocol, its smart contracts, multisig wallets, and treasury.
DAObox routinely provides reports to the DAO, documenting its performance, fund usage, and major activities carried out by the Gearbox Foundation.
The Gearbox Foundation presently holds the ownership of the IP related to the Gearbox Protocol, manages third-party service subscriptions and GitHub, oversees social network accounts, domain names, and has established a fiat payment account for the wrapper.
The foundation is poised to register trademarks associated with the protocol and routinely advises the DAO on legal aspects and potential future directions.